The proposed provincial banking law for the province of Alberta

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THE BANKING ACT

OF THE

PROVINCE OF ALBERTA

Prepared for attachment to a petition as provided by the
Direct Legislation Act of the Province of Alberta, asking a
Plebiscite on the question of whether or not this proposed Bank-
ing Act shall be enacted into Law in the Province of Alberta.

This Act shall be known as “The Provincial Banking Act of
the Province of Alberta.”

SECTION.
1. Organization of banks.
2. Name; capital stock; charter.
3. Date of existence.
4. Shares of stock.
5. Statement to bank commissioner; his certificate.
6. Increase of capital stock. °
7. Delinquent stock, how sold; old bank amend charter.
8. Dissolution of bank.
9. Management and control; bond of cashier; meeting of
board.
10. Liability of shareholders.
11. Investment of funds.
12. Relating to bank reserve.
18. Loans limited.
14. Penalty for false statement.
15. Penalty for insolvent bank receiving.
16. Banks not allowed without authority; penalty.
17. Report to commissioner on call.
18. Furnish statement of dividends, :

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19. Penalty for failure to repert. .
20. Refusal to comply with requirements,
‘21. ‘Appointment of commissioner.

22. Officer’s oath and bond.

23, Duty.to visit banks.

24. Fees for examination.

25. Record of fees.

26. May call for report of prior date.

27. Notice of call.

28. Insolvency; duty of commissioner.

29. How placed in commissioner’s hands.
30. Voluntary liquidation.

31, When insolvent.

32. Declare dividends.

33. Losses charged,

84, Can not withdraw capital stock.

35. Penalty for failure to conform.

36. What considered banking.

37. Unlawful to certify checks.

38. Intent to defraud or deceive.

39, Overchecks.

40. Bank borrowing; collateral security.

41. Name of bank; banker’s note not assets.
42. Reduction of capital stock.

43. When stock impaired. ~

44, Other banks may organize as provincial banks.
45, Private banks,

46, List of shareholders for inspection.

47. Refusal to be examined.

48. How authority revoked.

49. Real estate, how held and conveyed.

50. Real estate not exceed fifty per cent.

51. Transfer of stock.

52. Banks in receiver’s hands; examination ; report.

58. Forms to be provided; reports preserved; fees.
- 64. Receiver to institute proceedings.

55. Commissioner’s biennfal report.

56. Salaries.

57. Office of commissioner.

8. Willful neglect of commissioner.

59. Removal of officers.

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60. Deposits limited.

61, Attorney General to be informed of violations.

62, False oath, perjury.

63. Banking without authority.

64. Receiving deposits when bank is in failing condition.

65. Joinder of parties defendant.

66. Private banks included in this act.

67. Shall extend to personal representatives.

68, Deputies and clerks of commissioner, powers,

69. Deposits by minors authorized.

70. Extension of corporate existence.

71. Forged or raised checks.

72. Burglary with explosives.

73. Two-name accounts.

74. Relating to forgeries.

75. Cheats, fratids and bogus checks.

76. Relating to malicious slander of banks and financial
institutions,

77. Checks and drafts payable on holidays.

78, Relating to notaries public who are stockholders in banks
or corporations.

79. Prohibiting drawing checks or drafts on banks where no
funds or credit exists.

Sec. 1. Organization of Banks. Any five or more persons
may organize themselves into a banking corporation, and shall
be permitted to carry on the business of receiving money on de-
posit and to allow interest thereon, giving to the person depositing
eredit therefor; and of buying and selling exchange, gold, silver,
foreign coin, bullion, uncurrent money, bonds of the Dominion
of Canada and of the Province of Alberta, and bonds and war-
rants of cities, municipalities and school districts in the Province
of Alberta; of loaning money on real estate, chattel and personal
security at a rate of interest not to exceed the legal -rate allowed
by law; of discounting negotiable notes and of notes not negoti-
able, and to own a suitable building, furniture and fixtures for the
transaction of its business, of the value not to exceed one-third of
the capital of such bank; provided that nothing in this section

Shall prohibit such bank from holding and disposing of such real

. estate as it may acquire through the collection of debts due to it,
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"Bac. 2. Name; capital ‘stock; charter. The name selected

for such bank shall not be the name of any other bank doing

business in the Province or Dominion of Canada, but shall include
the word “Province,” and shall have the approval of the bank
commissioner, and the capital shall not be less than ten thous#hd
dollars in towns and cities with population less than 500; in towns
or cities with a population of 500 but not exceeding 1,000, the
capital shall not be less than fifteen thousand dollars; in all cities
of the third class with a population of 1,000 and over, the capital

shall not be less than twenty thousand dollars; in all cities of the
second class, the capital shall not be less than twenty-five thousand

dollars; and in all cities of the first class, the capital shall not be
less than fifty thousand dollars; and in addition to the other re-
quirements, shall contain the names and places of residence of its
stockholders and the amount of stock subscribed by each, and
may contain such other provisions not inconsistent with law as
the stockholders may deem proper. The charter shall be sub-
scribed by at least five of the stockholders of the proposed bank
who are residents of the Province of Alberta, and shall be ac-
knowledged by them; and the full amount of capital stock shall
be subscribed before the charter is filed; provided, that the limita-
tions in regard to capital herein shall not apply to banks already
chartered at the time of the passage of this act, except that no
bank shall be permitted to reduce its capital below the amount
provided by this act.

Sec. 3. Date of existence. The existence of such bank as a
corporation shall date from the filing of its charter, from which
time it shall have and may exercise the powers conferred by law
upon corporations generally, except as limited or modified by this
act; provided, that such bank shall transact no business except
the election of officers, the taking and approving their official
bonds, the receipts of payments on account of subscriptions to its
capital stock, and such other business as is incidental to its orga-
nization, until it hag been authorized by the bank commissioner
to commence the business of banking as hereinafter provided.

Sec. 4. Shares. The capital stock of any such association
shall be divided into shares of $100 each, and all subscriptions to
said capital stock shall be paid in cash; provided, that in the re-
organization of a bank, assets of the old bank worth par may be
accepted in lieu of cash.

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_ Sue. 5.: Statement, certificate. When the capital of any 7e
.sueh bank shall have been paid in, the president or cashier thereof
shall transmit to the bank commissioner a verified statement shqw-
ing the names and residence of stockholders, the amount of stock
subscribed, and the amount paid in by each; and the bank com-
missioner shall thereupon have the same power to examine into
the condition and affairs of such bank as if it had been before that
time engaged in the banking business; and he shall within thirty
days from the receipt of such statement make such examination,
and shall examine especially as to the amount of money paid,in
on account of its capital, and by whom paid, and the amount of
capital stock of which each stockholder is in good faith the owner,
and whether such bank has complied with the provisions of law in
all respects; and if such bank has been organized as prescribed,
and has in all respects complied with the provisions of law, said
commissioner shall issue to such bank, under his hand and seal,
‘a certificate showing ‘that it has been organized and its capital paid
in as required by law, and is authorized to transact a general bank-
_ ing business as provided by this act.

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Sec. 6. Increase of stock. No increase in the capital stock
of any such bank shall be made unless the same shall be fully paid
up at the time when subscriptions are entered therefor; and a
verified statement shall be transmitted to the bank commissioner
showing the amount of the increase, the names and places of resi-
dence of the subscribers therefor, the amount subscribed by each,
and that the same has been fully paid in. The date and amount
of each increase shall also be certified to the Provincial Secretary.

Sec. 7. Delinquent stock, how sold; old bank amend charter.
Whenever any shareholder, or his assignee, fails to pay any assess-
ment on his stock, when the same is required to be paid, the direc-
tors of such bank may sell the stock of such delinquent share-
holder, or as much thereof as is necessary to satisfy the debt, at
public auction, after having given three weeks’ previous notice
thereof in a newspaper published and in general circulation in the
city or municipal district where the bank is located, to any person
who will pay the highest price therefor, to be not less than the
amount due thereon with the expenses of the advertisement and
sale; but said stock so bid for shall at the price bid be first ten-
dered to the other stockholders of said bank at said price, and if
said stock is not taken by the said stockholders or any of: them,

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' then said stock shall be sold to the said highest bidder, and tha
“excess, if any, shall be paid tto the delinquent stockholder. If no
_ bidder can be found who will pay for such stock the amount due
‘thereon and the cost of the advertisement and sale, the amount
previously paid shall be forfeited to the bank, and such stock shall
‘be gold as the directors shall order, within six months from the
time of such forfeiture.

Sec. 8. Dissolution of. Any corporation transacting busi-
‘ness under this act may be dissolved by the Supreme Court of the
‘Province of Alberta in the following manner: A verified petition

shall be filed in tthe office of a clerk of said court, signed by the
president or a majority of the board of directors, setting forth that
stockholders representing two-thirds in amount of the stock of
such association have adopted a resolution favoring such dissolu-
tion, and directing proceedings to be instituted for ¢hat purpose, —
a copy of which resolution shall set forth that all claims and de-
mandse against such association have been paid and discharged ;
and thereupon a notice shall be published for the time and in the
manner prescribed by the law for service by publication. Such
notice shall state the location of the court in which the petition
has been filed, the substance and purpose thereof, and that unless
objections are filed thereto on or before a time to be stated, which
shall not be less than forty-one days from the first publication,
the relief prayed for will be granted. A copy of such notice shall
be sent to the bank commissioner within ten days after the first
publication thereof, and he shall, within thirty days thereafter,
make a thorough examination of the affairs of such bank, and file
a certified copy of his report with said petition. Any creditor or
stockholder may, on or before the time fixed by the notice, and
afterwards, if permitted by the court, file written objections to the
dissolution of such corporation. The petition and objections
thereto, if any, shall stand for hearing the same as a civil action;
and if upon the hearing thereof the court shall be satisfied that
the petition is true, and that there is no valid objection to the
dissolution of such corporation, it shall render judgment dissolv-
- ing the same.

Sec. 9. Management and control; cashier's bond; meetings.
The affairs and business of any banking corporation doing busi-
yeas under this act shall be managed and controlled by a board of
‘directors, not less than five nor more than thirteen in number,

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who shall be selected from the stockholders at their annual meet-
ing, which shall be held on any day between the ist and 10th days
of January of each year, and in the manner provided in the Joint |
Stock Companies Act. A majority of such directors shall be reai-
dents of the city or municipal district, or adjoining districts to that
in which the bank is located. The board shall designate one of
their number to act as president and one as secretary, and may
designate one or more of their number to act as vice president or
vice presidents, and shall select from among the stockholders a
cashier. Such officers shall hold their offices for the term of one
year and until their successors are elected and qualified, and before
entering upon the discharge of their duties shall take and sub-
scribe to an oath that they will, so far as the duty devolves upon
them, diligently and honestly administer the affairs of such bank,
and will not knowingly or willingly permit to be violated any of
the provisions of the law, and that they are the owners, in good
faith and in their own right, of the number of shares of stock sub-
scribed by them or standing in their names on the books of the
bank; and no person shall hold the office of director or cashier or
managing officer of any bank unless he owns, in his own name
and right and in good faith, at least five hundred dollars of stock,
which shall not be pledged or in any way hypothecated; provided,
that any trust company which shall be the owner of the required
amount of stock in any bank may, by resolution of its board of
direcfors, designate one of its stockholders to represent it, and
when so designated such stockholder shall be deemed and held to
be an owner in good faith for the purposes of this act. Such oath,
subscribed by the directors making it and certified by the officers
before whom it is taken, shall be immediately transmitted to the
bank commissioner and shall be filed and preserved in his office.
The board of directors shall require the cashier, and any and all
other officers having the care and handling of the funds of the
bank, to give good and sufficient bond to cover the term for which
they are elected, to be approved by them and held by such cus-
todian as the board may designate. The board of directors shall
hold not less than four regular meetings each year; such meetings
shall be held between the 1st and 10th days of January, April,
July and October of each year, and at such meetings a thorough
examination of the books, records, funds and securities held by
the bank shall be made by them, and the result of such examina-

tion shall be recorded in detail upon the record book of the bank.
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‘A Gtultied copy of the record of such ‘éetings, properly aworh to
and duly verified by a majority of the directors of said bank, shall
be forwarded to the Bank Commissioner within 10 days after
holding the same. ’

Sec. 10. Shareholders’ liability. The shareholders of every
bank organized under this act shall be additionally Hable for a
sum equal to the par value of stock owned, and no more.

Sec. 11. Investment of funds. No bank shall employ its
moneys, directly or indirectly, in trade or commerce, by buying
and selling goods, chattels, wares and merehandise, and shall not
invest any of its funds in the stock of any other bank or corpora-
tion, nor make any loans or discounts on the security of the shares
of its own capital stock, nor be the purchaser or holder of any such

‘shares unless such security or purchase shall be necessary to pre-

vent loss upon a debt previously contracted in good faith; and
stock so purchased or acquired shall, within six months from the
time of its purchase, be sold or disposed of at public or private
sale. After the expiration of six months any such stock shall not
be considered as a pant df the assets of any bank; provided, that
it may hold and sell all kinds of property which may come into
its possession as collateral security for loans or any ordinary col-
lection of debts, in the manner prescribed by law, but any goods
or chattels coming into possession of any bank as aforesaid shall *
be disposed of as soon as possible, and shall not be considered as a
part of the bank's assets after the expiration of six months from
the date of acquiring same.

Sec. 12. ' Relating to Bank Reserve. Each bank doing busi-
ness under this act shall hold and maintain a reserve consisting of
cash in its vaults and credits in solvent banks none of the stock-
holders of which are stockholders in the depositing bank, except
when approved by the provincial bank commissioner. Such re-
serve shall be held and maintained as follows:

(a) A bank located in a city having less than fifty thousand
population, in which the credits due other banks are less than
twenty per centum of its deposits, shall hold and maintain reserves
equal to twelve per centum of the aggregate amount of its demand
deposits and five per centum of its time deposits, as follows: In
its vaults four twelfths, and either in its vaults or in other banks

eight twelfths; provided, that upon approval of the bank commis-

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aioner, any bank, located in a city having less than one thousand
population, shall not be required to keep in its vaults more than

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three twelfths of its reserves, an

(b) A bank located in a city having not less than fifty thous-
and, population, in which the credits due other banks are not less
than twenty per centum of its deposits, and any bank located in a
city having a population of fifty thousand or over, shall hold and
maintain reserves equal to fifteen per centum of the aggregate
amount of its demand deposits and five per centum of its time
deposits as follows: In its vaults five fifteenths, and either in its
vaults or in other banks ten fifteenths.

(c) The reserves carried by a bank in other banks may be
checked against, under such regulations as may be prescribed by
the provincial bank commissioner, for the purpose of meeting
liabilities; provided, that no bank shall make new loans or pay
dividends, unless, at the time, the required reserves are main-
tained.

(d) The net balance only, due to and from other banks, shall
be taken into account in estimating the amount of deposita on
which the reserve requirements of any bank is based. The bank
commissioner may refuse to consider as a part of the reserves of
any bank, any funds in another bank any of whose stockholders
are stockholders of the depositing bank, or which shall neglect or

refuse to furnish him with information asked for relating to its ‘

solvency or concerning its business with the depositing bank.

(e) Demand deposits within the meaning of this act shall
comprise all deposits within thirty days, and time deposits shall
comprise all deposits payable after thirty days, and all savings
accounts and certificates of deposit which are subject to not less
than thirty days’ notice before payment.

(f{) The bank commissioner may suspend for a period not to
exceed thirty days, and from time to time renew such suspension
for periods not to exceed fifteen days, any reserve requirements
specified in this act.

(g) Any bank whose reserves are below that required by this
act, which shall violate any regulation or requirement of the pro-
vincial bank commissioner as to such reserves, and shall fail to
restore its reserves, for a period of thirty days after being notified
so to do, may be deemed insolvent, and the provincial bank com-
missioner may take possession thereof and proceed in the manner
provided by law as to insolvent banks.

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Sec. 13. Loans timited. The total liability to any bank of
any person or company, corporation or firm, for money borrowed,
including in the liabilities of a company or firm the liabilities of
the several members thereof, shall not, at any time, exceed fifteen
per cent. of the capital stock and surplus of such bank actually
paid in; but the discount of bills of exchange drawn in good faith
against actual existing values or loans upon produce in transit, or
upon warehouse or elevator receipts as collateral security, and the
discount of commercial or business paper actually owned by the
person negotiating the same, shall not be considered as money
borrowed. The bank commissioner may, at any time, order any
excess loan reduced to the legal limit within sixty days from the
date of notification by him.

Sec. 14. Penalty for false statement. Every officer, direc-
tor, agent or clerk of any bank (other than a dominion bank)
doing business in the Province of Alberta, who wilfully and know-
ingly subscribes to or makes any false report or any false state-
ment or entry in the books of such bank, or knowingly subscribes
or exhibits any false writing or paper, with the intent to deceive
any person as to the condition of such bank, shall be punished by
a fine not to exceed $1,000, or by imprisonment in the peni-
tentiary not less than one year nor more than five years.

Sec. 15. Insolvent bank receiving deposits. No bank shall
accept or receive on deposit, with or without interest, any money,
bank bills or notes, or Dominion of Canada treakury notes, gold
or silver certificates, or currency, or other notes, bills, checks, or
drafts, when such bank is insolvent; and any officer, director,
cashier, manager, member, partner or managing partner of any
bank, who knowingly violate the provisions of this section or be
accessory to or permit or connive at the receiving or accepting on
deposit of any such deposit, shall be fhilty of a felony, and upon
eonviction thereof shall be punished by a fine not exceeding
$5,000, or by imprisonment in the penitentiary not less than one
year nor more than five years, or by both such fine and imprison-
ment.

Sec. 16. Banks without authority; penalty. It shall be un-
lawful for any individual, firm or corporation to transact a bank-
ing business, or receive deposits, without having first transmitted
to the bank commissioner a verified statement of the resources and
liabilities of such individual, firm, or corporation; said statement

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shall be made in accordance with sections 6 and 17 of this Rok
The bank commissioner shall thereupon have power to examine
_ into the condition and affairs of such.bank, and shall within
thirty days from the receipt of such statement make such examina-
tion; and if such bank has in all respects complied with the pro-
visions of law applicable thereto, said commissioner shall issue to
such individual, firm, or corporation, under his hand and seal, a
certificate showing the amount of capital paid im and that the
same is authorized to transact a general banking business, as pro-
vided by this act. And it shall be unlawful for any individual,
firm or corporation to transact a banking business without having
first received such certificate from the bank commissioner. Any
person violating the provisions of this section, either individually
or as an interested party in any association or corporation, shall
be guilty of a misdemeanor, and on conviction thereof shall be
fined in a sum not less than $300 nor more than $1,000, or by
imprisonment in the provincial jail not less than thirty days nor
more than one year, or by both such fine and imprisonment.

Sec. 17. Report to commissioner. Every bank shall make
at least four reports each year, and oftener if called upon, to the
bank commissioner, according to the form which may be prescrib-
ed by him, verified by the oath or affirmation of the president or
cashier of such association, and attested by the signature of at
least three of the directors. Each such report shall exhibit, in
detail and under appropriate heads, the resources and liabilities
of the association at the close of business on any past day by him
specified, and shall be transmitted to the bank commissioner with-
in ten days after the receipt of a request or requisition therefor
from him, or within ten days after publication of the call for such
statement in the Alberta Provincial Gazette, and shall be pub-
lished in such form as the commissioner may prescribe, within
ten days after the same is made out, in a newspaper published in
the place where such bank is established, or if there is no news-
paper in the place then in one published nearest thereto in the
same city or district, at the expense of the bank; and such proof
of publication shall be furnished within five days after date of
publication as may be required by the bank commissioner. The
bank commissioner shall also have power to call for special reports
from any bank whenever in his judgment the same are necessary
in order to obtain a full and complete knowledge of its conditign.
The verification of such statement shall be made in the following
form:

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Province oy Anperta, CITY oF........ To Wrr:

| , president [or cashier] of said bank, do
solemnly swear that the above statement is true; that said bank
has no liabilities, and is not indorser on any note or obligation,
other than shown in the above statement, to the best of my know!l-
edge and belief. So help me God.

Lecce ee cece eens , President—Cashier.

Sec. 18. Statement of dividends. In addition to the reports
required by the preceding section, each bank doing business under
this act shall, within ten days afiter the declaring of any dividend,
forward to the bank commissioner a statement of the amount of
such dividend and the amount carried to surplus and undivided-
profit account, and shall forward to the commissioner, within ten
days after the 1st day of January in each year, in such form as he
may designate, a verified statement showing the receipts and dis-
bursements of such bank for the preceding year.

Sec. 19. Fathng to report. Every bank which fails to make
and transmit or to publish any report required under either of the
two preceding sections shall be subject to a penalty of fifty dollars
for each day after the period respectively therein mentioned that
it delays to make and transmit its report of the proof of publica-
tion. Whenever any bank delays or refuses to pay the penalty
herein imposed for a failure to make and transmit or to publish a
report, the commissioner is hereby authorized to maintain an
action in the name of the Province of Alberta against the delin-
quent bank for the recovery of such penalty, and all sums collect-
ed by such action shall be paid into the provincial treasury and
placed to the credit of the banking department.

Sec. 20. Refusal to comply. Every bank doing business
under authority of this act which shall refuse or neglect to comply
with any requirements lawfully made upon it by the bank com-
missioner pursuant to this act, for a period of ninety days after
demand in writing is made, shall be deemed to have forfeited its
franchise, and the bank commissioner shall thereupon revoke its
authority to transact a banking business, by notice to the presi-
dent or cashier thereof, by publication in the official Provincial
Gazette; and any failure on the part of such bank to comply with,
or any violation of the provisions of this act, shall work a for-
feiture of its franchise; and in either case the attorney-general,

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upon the request of the bank commissioner, shall ‘commence an

action for the purpose of dissolving said corporation.

Sec. 21. Bank commissioner. The Executive Council shall
appoint, by and with the advice of the Alberta Legislature, a bank
commissioner for the Province of Alberta, whose term of office
shall be during the pleasure of the Government and until his
successor is appointed and qualified. The bank cominiasioner

_ shall appoint an assistant bank commissioner, two field deputies,
one clerk, and one stenographer. The compensation of the bank
commissioner and his staff for services shall be such amounts as
the Legislature may provide. No person shall be eligible to ap-
pointment as bank commissioner or deputy who shall not have
had at least three years’ practical knowledge uf banking, or shall
have served at least one term as bank commissioner; provided,
that no bank commissioner nor his deputy shall examine any
bank in which he is a stockholder or in any manner financially
interested. If a vacancy shall occur in the office of bank commis-
Sioner by death, resignation, or otherwise, the same shall be filled
by appointment by the Government of the Province of Alberta;
and any such appointee shall hold the office for the unexpired
terin.

Sec, 22. Oath and Bond. The bank commissioner and de-
puties shall each, before entering upon the discharge of his duties,
take and subscribe the usual oath of office and execute to the Pro-
vince of Alberta a good and suificient bond, to be approved by the
Executive Council, conditioned that he will faithfully and impar-
tially discharge the duties of his office, and pay over to the persons
entitled by law to receive it all moneys coming into his hands bv
virtue of his office; the commissioner in the sum of $20,000 and
‘the deputies in the sum of $10,000, with sufficient sureties, to be
approved and filed as provided by law.

Sec, 23. Visit banks. It shall be the duty of the commis-
sioner or his deputy to visit each and every bank doing business
in this Province, except banks with Dominion of Canada charters,
at least twice each year, and oftener if necessary, for the purpose of
making « full and careful investigation and inquiry into the con-
dition of affairs of such bank; and for that purpose the commis-
sioner or deputy is hereby authorized and empowered to adminis-
ter oaths and to examinee under oath the owners and directors
and all officers and employees and agents of such bank. The of-

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fioer making such investigation shall reduce the result thereof to
writing, which shell contain a full, true and careful statement of
the condition of such bank.’

Sgc. 24. Fees for examination. Each bank examined by
the provincial bank commissioner, his assistants or deputies, for
each and every examination shall pay to the officer making the
examination a fee as follows: Any bank having loans of not over
$75,000, fifteen dollars; any bank having loans of over $75,000
and not more than $150,000, twenty dollars; any bank having
loans of over $150,000 and not over $300,000, thirty-five dollars;
any bank having loans of over $300,000 and not more than
$450,000, fifty dollars; any bank having loans of over $450,000
and not more than $600,000, sixty dollars; any bank having loans
of over $600,000, seventy-five dollars.

Src. 25. Record of fees. It shall-be the duty of the bank
commissioner to keep a record of all fees collected by him or his
deputy, together with a record of the expenses incurred in making
the examination of all banks, and at the end of each quarter pay
over to the provincial treasurer all fees collected during the pre-
ceding quarter; and he shall file with the provincial treasurer an
itemized statement showing from whom collected.

Sxc. 26. Report of prior date. The commissioner shall have
power, at any time when he deems it necessary, to call upon any
bank fof a report of its condition upon any given day which has
passed, or as often as the commissioner may deem it necessary,

Sec. 27. Notice. A copy of each call made by the bagk
commissioner for a statement from all banks doing business under
this act shall be mailed to each bank, and such call shall be pub-
lished in the official provincial paper, and such publication shall
be deemed legal notice to all such banks.

Szc. 28. Insolvency; duty of bank commissioner. If, upon
examination by the provincial bank commissioner or his deputy,
or from any report made to the bank commissioner, it shall ap-
pear that any bank is insolvent, or has willfully violated any re-
quirement of this act, it shall be the duty of the bank commis-
sioner to immediately take charge of such bank and all property
and effects thereof. The bank commissioner may appoint a
special deputy bank commissioner to take charge of the affairs of
an insolvent bank temporarily until a receiver is appointed; such

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“et

deputy shall qualify, give bond and receive compensation. the,
same as the regular deputy ; such compensation to be paid by such
bank or allowed by the court as costs in case of the appointment
of a receiver ; provided, that in no case shall any bank continue in
charge of such special deputy for a longer period than six months.
Upon taking charge of any bank, the bank commissioner shall as
goon as possible ascertain, by a thorough examination into its af-
faire, its actual condition; and whenever he shall become satisfied
that such bank can not resume business or liquidate its indebted-
ness to the satisfaction of all its creditors, he shall forthwith ap-
point a receiver and require of him such bond and security and
allow him such reasonable compensation as he deems proper;
such compensation to be subject to the approval of the Supreme
Court, upon the application of any party in interest. Such
Yeceiver, who shall be a resident of the Province of Alberta,
under the direction of the bank commissioner, shall take charge
of such bank and its assets, and wind up the affairs and business
thereof for the benefit of its depositors, creditors and stockholders.
Such receiver shall, upon the order of a court of competent juris-
diction, or the judge thereof in chambers, upon the application of
the bank commissioner, sell or compound all bad or doubtful debts
due to the bank and sell all personal property of such bank on
such terms as the court shall direct, and may, upon like order of
such court, sell all real property of such bank on such terms as
the court shall direct, and shall, if necessary to pay the debts of
such bank, enforce the individual liability of the stockholders.
Such receiver shall pay over all moneys received by him to the
creditors of the bank as ordered by the bank commissioner; pro-
vided, that the bank commissioner shall appoint any person who
the holders of more than fifty per cent. of the claims against such
bank may agree upon in writing; and provided further, that such
creditors so agreeing shall have the right to contract with the
person who they may name as to the compensation and charges
to be by him received for liquidating the affairs of such bank, and
shall make report to the bank commissioner of all his acts and
proceedings.

Sec. 29. In commissioner's hands. Any bank doing busi-
ness under this act may place its affairs and assets under the con-
trol of the bank commissioner by posting a notice on its front door
as follows: “This bank is in the hands of the provincial bank
commissioner.” The posting of such notice or the taking posses-

17

sich of' any bank by the ‘bank corhmissioner shall be sufficient to
place all its asséts‘and property of whatever nature in the posses-
sion of the bank commissioner, and shall operate as a bar to any
attachment proceedings.

Sec, 30. Voluntary liquidation. Any bank doing business
under: this act may voluntarily liquidate by paying off all of its
depositors in full; and upén filing a verified statement with the
bank commissioner, setting forth the fact that all of its liabilities
have been paid, and the surrendering of its certificate of authority
to transact a banking business, it shall cease to be subject to the
provisions of this act, and may continue to transact a loan and
discount business under its charter; provided, that nothing in this
section shall prevent the bank commissioner from making exam-
ination of any such bank for the purpose of determining that all
its liabilities have been paid.

Sec. 31. When insolvent. A bank shall be deemed to be
insolvent—first, when the actual cash market value of its assets
is insufficient to pay its liabilities; second, when it is unable to
meet the demands of its creditors in the usual and customary
manner; third, when it shall fail to make good its reserve as re-
quired by law.

Sec. 32. Declare dividends. The directors or owners of any
bank doing business under this act may declare dividends of so
much of the net profits of their bank as they shall judge ex-
pedient ; but each bank shall, before the declaration of a dividend.
carry one-tenth part of its net profits since the last preceding
dividend to its surplus fund, until the same shall amount to fifty
per cent. of its capital stock.

Sec, 33. Losses charged. Any losses sustained by any bank
in excess of its undivided profits may be charged to its surplus
account; provided, that its surplus fund shall thereafter be reim-
bursed from its earnings, and no dividend shall be declared or
paid by any such bank in excess of one-half of its net earnings
until its surplus fund shall be fully restored to its former amount.

Sec. 34. Can not withdraw capital. No bank officer or di-
rector thereof shall, during the time it shall continue its banking
operations, withdraw or permit to be withdrawn, either in form of
dividends or otherwise, any portion of its capital. If losses have
at any time been sustained by such bank equal to or exceeding its

18

y
~~

undivided profits then on hand, no dividend shall be made, and
no dividend shall be declared by any bank while it continues its

banking business to any amount greater than its net profits on ©

hand, deducting therefrom its losses, to be ascertained by a care-
ful estimate of the actual cash value of all its assets at the time of
making such dividends; the present worth of all maturing paper
shall be estimated at the usual discount rate of the bank. Nothing
in this section shall prevent the reduction of the capital stock of
any bank in the manner prescribed herein.

Sec. 35. Penalty. Every banker, officer, employee, director
or agent of any bank who shall neglect to perform any duty re-
quired by this act, or who shall fail to conform to any lawful
requirement made by the bank commissioner, shall be deemed
guilty of a misdemeanor, and upon conviction thereof shall be
punished by a fine not to exceed $1,000, or by imprisonment in
the provincial jail not to exceed one year, or by both fine and
imprisonment.

Sec. 36, Considered banking. Any individual, firm or cor-
poration who shall receive money on deposit, whether on certifi-
cates or subject to check, or shall receive money for which it issues
its check, draft, bill of exchange or other evidence of indebtedness
for which it charges a fee, shall be considered doing a banking
business, and shall be amenable to all the provisions of this act;
provided, that promissory notes issued for money received on
deposit shall be held to be certificates of deposit for the purposes
of this act.

Sec. 37. Certified checks, It shall be unlawful for any offi-
cer, clerk or agent of any bank doing business under this act to
certify any check, draft or order drawn upon the bank unless the
person, firm or corporation drawing such check, draft or order has
on deposit with the bank, at the time such check, draft or order is

certified, an amount of money equal to the amount specified in
such check, draft, or order. Any check, draft or order so certified

by the duly authorized officer shall be a good and valid obligation
against such bank; but any officer, clerk or agent of any bank
violating the provisions of this section shall be deemed guilty of a
misdemeanor, and upon conviction shall be punished as provided
in section 35 of this act.

Src. 38. Intent to defraud. Every president,.director, cash-
ier, assistant cashier, teller, clerk, officer or agent of any bank who
19

embezzles, abstracts or willfully misapplies any of the moneys,
funds, securities or credita of the bank, or who issues or puts forth
any certificate of deposit, draws any draft or bill of exchange,
makes any acceptance, assigns any note, bond, draft, bill of ex-
change, or who makes use of the name of the bank in any manner,
with intent in either case to injure or defraud the bank, or any
individual, person, company, or corporation, or to deceive any
officer of the bank, or any agent appointed to examine the affairs
of the bank, and any person who with like intent aids or abets any
officers, clerk or agent in violation of this act, shall be deemed
guilty of a felony, and upon conviction thereof shall be imprison-
ed in the provincial jail for not less than one year nor more than
two ‘years.

Sec. 39. Overchecks. Any bank officer who shall pay out
or permit to be paid out the funds of any bank upon the check,
order or draft of any individual, firm, company, corporation or
association which has not on deposit with such bank a sum equal
to such check, order or draft, shall be personally liable to such
bank for the amount so paid.

Src. 40. Collateral security. No bank, bankers or bank of-
ficers shall give preference to any depositor or creditor by pledg-
ing the assets of the bank as collateral security, except bonds of
the Dominion of Canada, of the Province of Alberta, or of some
municipality or school district of the Province of Alberta, or other
securities, may be deposited with the provincial treasurer as se-

curity for the deposit of provincial money and with the trustees
of postal savings bank funds for the security of such funds; pro-
vided, that any bank may borrow money for temporary purposes
not to exceed in amount fifty per cent. of its paid-up capital, and
may pledge assets of the bank not exceeding twenty per cent. in
excess of the amount borrowed, as collateral security therefor; pro-
vided further, that whenever it shall appear that a bank is bor-
rowing habitually for the purpose of re-loaning, the bank com-
missioner may require such bank to pay off such borrowed money.
Nothing herein shall prevent any bank from rediscounting in
good faith and indorsing any of its negotiable notes. It shall be
unlawful for any bank to issue its certificate of deposit for the
purpose of borrowing money. ‘

Sec. 41. Name, banker's note. Any individual or firm do-
ing business as a private bank shall designate a name for such

20
‘

«

bank; and all property, real or personal, owned by such bank hall
be held in the name of the bank, and not in the name of the-in-
dividual or firm; all of the assets of any private bank shall be
exempt from attachment or execution by any creditor of such
individual or firm until all liabilities of such bank shall have been
paid in full. No private banker shall use any of the funds of his
bank for his private business, and the note of the owner or owners
of any private bank shall not be considered or accepted as a part
of its assets. .

Sec. 42. Stock, how reduced. The capital stock of any bank

doing business under this act may be reduced at any time by reso-
lution adopted by a vote of its stockholders, representing three-
fourths of the capital of such bank, at any regular meeting, or at
a special meeting held for that purpose, of which all stockholders
shall have notice as provided in the by-laws, subject to the ap-
proval of the bank commissioner. When the bank commissioner
has approved of any such reduction, a certificate signed by the
president and cashier of the bank setting forth the reduction of
its capital and the names and amount of stock held bv its stock-
holders shall be filed with the provincial secretary, and a duplicate
copy shall be forwarded to the bank commissioner. Whenever
the capital of any bank shall be reduced ag provided in this act,
every stockholder, owner or holder of any stock certificate shalk
surrender same for cancellation, and shall be entitled to receive &
new certificate for his proportion of the new stock; no dividend
shall be paid to any such stockholder until the old certificate shall
have been surrendered.

Sec. 43. Stock impaired. Whenever it shall appear that the

capital stock of any bank doing business under this act has been
impaired, the bank commissioner shall notify such bank to make
such impairment good within ninety days; and it shall be the
duty of the officers and directors of any bank receiving such notice
from the bank commissioner to immediately call a special meeting
of its stockholders, for the purpose of making assessment on its
stock sufficient to cover the impairment of its capital; provided,
that such bank may reduce its capital to the extent of the impair-
ment, if such reduction will not place its capital below the amount
required by this act.

Src. 44. May organize as provincial bank. Any private
bank doing business in this province may incorporate as a prévin-
21

PSII eta, no

»

eeiat bank aa provided herein for the organization of banks; pro-
wided, that the bank commissioner may accept good assets of such
private bank, worth not less than par, in lieu of cash in payment
for the stock of such provincial bank.

“See, 45. Private banks. Each individual or firm engaged
‘tn the banking business shall conform to the provisions of section
2 of this act so far as said section relates to its name and capital;
provided, that the word “provincial” shall not be a part of its
mame; and provided further, that in all advertisements or pub-
Yished statements made by such bank, and upon all stationery
aged by it, the words “private bank” shall appear.

Suc. 46. List of shareholders. The president and cashier of

every incorporated bank shall cause to be kept, at all times, a full
and correct list of the names and residences of all the shareholders

in the bank and the number of shares held by each, in the office
where its business is transacted. Such list shall be subject to the
Inspection of all the shareholders and creditors of the bank, and
the officers authorized to assess taxes under provincial authority,
- during the business hours of each day in which business may be
Sepally transacted. A list of the owners of private banks shall be
kept in like manner. A copy of such list, on the first Monday in
. January of each year, verified by oath of such president, cashier,
.or owners, shall be transmitted to the bank commissioner.

Sec. 47. Refusal to be examined. Whenever any officer of
any bank shall refuse to submit the books, papers and concerns of
such bank to the inspection of the commissioner, deputy or exam-
iner appointed as aforesaid, or shall in any manner obstruct or
interfere with him in the discharge of his duty, or refuse to be

- examined on oath touching the concerns of the bank, the com-
missioner may revoke the authority of such bank to transact a
banking business, and may, with the concurrence of the attorney-
general, institute proceedings for the appointment of a receiver
for such bank to wind up its business.

Suc, 48. Authority revoked. Any officer of any bank whose

- authorily to transact a banking business has been revoked as
" herin provided, who shall receive or cause to be received any

caleposit of whatever nature after such revocation, shall be subject
to the penalty provided in section 16 of this act.

Mc. 49. Real estate, held and conveyed. Any bank may
- purchase, hold and convey real estate for the following purposes,
22

but-no other: First, such as-shall -be necessary for the conventéat
transaction of its business, including its furniture'and fixtures; bate.)
which shall not exceed one-third of the paid-in capital; sedond,
such as shall be conveyed to it in satisfaction of debts previously: ~
contracted in the course of its business; third, such as it shal] purrs -
chase at sale under judgment, decrees or mortgape foreclosure
under securities held by it; but a bank shall not bid, at any suche
sale, a larger amount than to satisfy its debt and costs. Real estate
shall be conveyed under corporate seal of the bank and the band
of its president or vice president, and cashier or treasurer. ‘No
real estate acquired in the cases contemplated in the second and
third subsections above shall be held for a larger time than five
years. If not sold before the expiration of said five years, it must
be sold at private or public sale within thirty days thereafter, or:
charged off out of the earnings or surplus of said bank. ban

Sec. 50. Real estate. Any bank now doing business in this
province, other than Dominion banks. which owns real estate in
excess of fifty per cent. of its capital shall reduce its holdings by
converting same into cash or other good assets, to an amount not
exceeding fifty per cent. of its paid-in capital, within one year
after the passage of this act.

Sec. 51. Transfer of stock. The shares of stock of an incor-
porated bank shall be deemed personal property, and shall. be
transferred on the books of the bank in such manner as the by-
laws thereof may direct; but no transfer of stock shall be valid
against a bank so long as the registered holder thereof shall be
liable as principal debtor, surety or otherwise to the bank for any
debt which shall be due and unpaid, nor in such ease shall any
dividend, interest or profit be paid on such stock so long as such
liabilities continue, but all such dividends, interests or profit shal
be retained by the bank and applied to the discharge of such lia~
bilities; and no stock shall be transferred on the books of any bank
without the consent of the board of directors, where the registered
holder thereof is in debt to the bank for any matured and unpaid -
obligation; and no transfer of stock shall be made when the bank
is in a failing condition, or when its capital is impaired. All
transfers of stock shall be certified to the bank commissioner
immediately.

The only kind of transfer which can avail, to affect the rights
of the bank, its creditors and the public, is a transfer on the bookis:
of the bank.

23

- Swe, 52. In hands of receiver; examined, report. The bank
commissiener shall examine each and every bank in the hands of
@ receiver at least once in each six months, until its affairs shall be
wound up, and shall file a copy of each such examination with a:
clerk of the‘ Supreme Court in the district where such bank is
located. Receivers of all insolvent banks shall make reports to the
bank commissioner in the same manner as is required of other
banks, and shall cause such statements to be published in like
manner. Any receiver of an insolvent bank who shall fail to
comply with the provisions of this section, or who shall neglect or
refuse to submit the affairs of such bank to an examination by the
bank commissioner or his deputy, or who shall violate any of the
provisions of this act relating to the examination of banks, shall
be subject to the same penalties provided for officers or employees
of banks.

Sec. 53. Forms; reports; fees. For the purpose of carrying
into effect the provisions of this act, the bank commissioner shall
provide a form for and make requisition upon the provincial seg-
setary for the necessary blanks for such examinations and reports;
and all examinations and reports received by him shall be pre-
served in his office. It shall be the duty of the bank commissioner
to furnish a certified copy of any published official statement made
by the bank, to any person “demanding the same, upon the pay-

-ment to him of the sum of ten cents per folio for each and every
folio therein, and fifty cents for his certificate thereto, which fees
shall be paid to the provincial treasurer quarterly, and by him
placed to the credit of the bank fund.

Sec. 54. Institute proceedings. At any time after the clos-
ing of any incorporated bank it shall appear to the receiver thereof
that the assets of such bank are insufficient to pay its liabilities,
it shall be the duty of such receiver to immediately institute proper
proceedings, in the name of the bank, for the collection of the
liability of the stockholders of such bank; all sums so collected to
become a' part of the assets of such bank and to be distributed
pro rata %o the creditors thereof in the same manner as other
funds; provided, that all transfers of property by a stockholder
after the closing of any such bank and before the payment of the
double liability as provided by this act shall be absolutely void as
against said double liability. No action by any creditof against
any stockholder of such bank for the recovery of such liability

24

‘shall be maintained unless it shall appear to the satisfaction of the
'- gourt that the receiver has failed to commence action.as'herein

provided.

Sec. 55. Btennial eport. The bank commissioner shall
make,a report to the government on September 1 of every even--
numbered year, which report shall contain the names of the own-
ers or the principal officers, the paid-up capital of each, then:
number of banks in the province, the name and location of each,
the number and date of examinations and reports made of and by”
each during the period covered by the report, and such other im
formation concerning the same as the bank commissioner may
deem necessary to inform the lieutenant-governor of the condition
thereof.

Sec. 56. Salaries. The legislature shall appropriate a sum
for each year to cover the incidental expenses of the bank ecom-
missioner’s office, and such sum as may be necessary to defray the
travelling expenses of the commissioner and his deputies. ATI
money actually and necessarily paid out by the commissioner and
his deputies for travelling and incidental expenses shall be paid
to them upon the auditor’s warrants, to be issued upon sworn
vouchers containing an itemized account of such expenses.

Sec. 57. Office of commissioner. Tt shall be the duty of the
Executive Council to provide such commissioner with a suitable
office in the provincial capitol, and the necessary books, blanks,
office furniture and seal of office to enable him to discharge his.
duties of his office.

Src. 58. Neglect of commissioner. That any bank commis-~
sioner or deputy bank commissioner who shall willfully neglect
to perform any duty provided for by this act, or who shall know-
ingly and willfully permit the violation of ‘any of the provisions
of this act for a period of ninety days, by any bank doing business
under this act, or who shall knowingly or willfully make any false
statement concerning any bank, or who shall be guilty of .any
misconduct or corruption in office, shall be deemed guilty of a
misdemeanor, and, upon conviction thereof in any court of com-
petent jurisdiction, shall be punished by a fine of not exceeding
one thousand dollars, or by imprisonment in the provincial jaif
not to exceed one year, or by both such fine and imprisonment, in
the discretion of the court, and in addition thereto shall be re-
moved from office by the government.

° 25

empleyed under authority of law directly conferred or by ap-
propriation, may be authorized by the bank commissioner to ex-
amine any bank within the Province of Alberta, subject to exam-
ination under provincial authority; and any examination so made
shall have the same effect in all respects as examinations made by
the bank commissioner himself.

Sec. 69, Deposits by minors authorized. It shall be lawful
for any bank now or hereafter doing business in the Province of
Alberta to receive deposits from minors, and pay same upon the
order of such minors. Payments so made shall discharge the bank
forever from further liability on account of the money so paid.

Sgc. 70. Extension of corporate existence. That provincial '
banks whose charters have lapsed by expiration of time may have
such charters and charter rights extended and renewed in the
manner now provided by law for the extension of charters and bv
making application to the Provincial Secretary for such renewal
and extension of charter in the same manner as is provided by law
for the extension of charters in other corporations, and upon the
payment of the same fees.

Sec. 71. Forged or raised checks. No bank shall be Hable
toa depositor for the payment by it of a forged or raised check
unless within six months after the return to the depositor of the
voucher of such payment such depositor shall notify the bank
that the check so paid is forged or raised.

Sac. 72. Burglary with explosives. That any person who
‘(with intent to commit crime) breaks and enters, either by day
or by night. any building, whether inhabited or not, and opens
or attempts to open any vault, safe or other place by use of nitro-
glycerine, dynamite, gunpowder or any other explosive, shall be
deemed cuilty of burglary with explosives.

(a) That any person duly convicted of burglary with ex-
plosives shall be sentenced to the penitentiary, in the discretion of
the court, for a period of not less than ten years nor more than
thirty years.

Src. 73. Trwo-name accounts. When a deposit has been
made, or shall hereafter be made, in any bank transacting business
in this province, in the names of two persons payable to either, or
payable to either or the survivor, such deposit or any part thereof,
or any interest or dividend thereon, may be paid to either of said

28

persons whether the other be living or not; and the receipt or ac-
quittance of the person so paid shall be a valid and sufficient re-
lease and discharge to the bank for any payment so made.

Sec. 74. Relating to forgeries. In any criminal prosecution
for forgery where the charge includes the falsely making and
forging of a signature of another person to any written instru-
ment, proof that such signature is not in che handwriting of the
person whose signature it purports to be shall be prima facie evi-
dence that the signing of such name was unauthorized and is a
forgery.

Sec. 75. Cheats, frauds and bogus checks, Every person
who, with intent to cheat and defraud, shall obtain from any other
person or persons, any money, property or valuable thing, by
means or by use of any trick or deception, or false or fraudulent
representation, or statement or pretense, or by any other means or
instrument or devise, or by means of any check or by any other
written or printed or engraved instrument or spyrious coin or
metal, shall upon conviction thereof be punished in the same
manner and to the same extent as for stealing the money, property
or thing so obtained.

Sec. 76. Relating to malicious slander of banks and finan-
cial institutions. Whenever any person maliciously and without
probable cause circulates or causes to be circulated any rumor
with intent to injuriously affect the financial standing or reputa-
tion of any bank, financial or business institution or the financial
standing of any individual in this province, either verbally or in
writing, or makes anv statement or circulates or assists in circulat-
ing any false rumor or report for the purpose of injuring the fin-
ancial standing of any bank or financial institution, or seeks either
by word or action to start a run upon said bank or financial inati-
tution, or connives or conspires with any person for the purpose
of injuring the standing, or starting a run on said bank of finan-
cial institution, he shall be deemed guilty of a misdemeanor and
upon conviction thereof shall be punished by a fine of not more
than $500 and by imprisonment in jail for not less than three
months nor more than one year.

Sec. 77, Checks and drafts payable on holidays. No pro-
vision of the act relating to negotiable instruments, or of any law
of this province, shall be so construed as to prevent banks from
paying checks, drafts, or other bills of exchange upon Saturday

29

afternoon, or upon any legal holiday; provided, such payments
would be legal if made at other times.

Src. 78. Relating to notaries public who are shareholders or
officers in banks or corporations. It shall be lawful for any no-
tary public who is a stockholder, director, officer, or employee of a
bank or other corporation to take the acknowledgment of any
party to any written instrument executed to or by such corpora-
tion, er to administer an oath to any other stockholder, director,
officer, employee, or agent of such corporation, or to protest for
non-acceptance, or non-payment bills of exchange, drafts, checks,
notes and other negotiable instruments which may be owned or
held for collection by such corporation; provided, it shall be un-
lawful for any notary public to take the acknowledgment of an
instrument by or to a bank or other corporation of which he is a
stockholder, director, officer, or employee, where such notary is a
party to such instrument either individually or as a representa-
tive of such corporation, or to protest any negotiable instrument
owned or held for collection by such corporation, where such
notary is individually a party to such instrument.

Sec. 79. Prohibiting drawing checks or drafts on banks
where no funds or credit exist. It shall be unlawful for any per-
son, corporation, or partnership, to draw, make, utter, issue or
deliver to another any check or draft on any bank or depository
for the payment of money or its equivalent, knowing, at the time
of the making, drawing, uttering or delivery of any such check
or draft as aforesaid, that he has no funds on deposit in or credits
with such bank or depository with which to pay such check or
draft upon presentation.

(a) That any person, corporation or partnership willfully vio-
lating any of the provisions of this act shall be guilty of a mis-
demeanor if said check or draft is drawn for twenty dollars or
less, and shall be punished by a fine of not less than twenty-five
dollars and not more than one hundred dollars, or imprisonment
in the provincial jail for a period of not less than ten days and not
more than six months, or by both such fine and imprisonment: if
said check or draft shall be drawn for an amount of twenty dol-

lars or more, such person shall be deemed guilty of a felony and
upon conviction shall be punished by a fine of not less than one
hundred dollars and not more than five thousand dollars, or by
imprisonment for a period of not less than one year nor more
than five years, or by both fine and imprisonment.

30

(6) That in any case where a prosecution is begun under thig
act, the defendant shall have a right, upon application made for
that purpose before trial, to have said action abated by showing to
the court or judge that he has had an account in said bank upon
which said check or draft was drawn, thirty days next prior to the
time said check or draft was delivered and that said check or draft
was drawn upon said bank without intent to defraud the party
receiving the same, and if the court shall so find, said action shall
be abated and the defendant shall be discharged upon paying into
court the amount of such check and the costs in said cuse.

(c) “Credits” defined. The word “credits’’ as used herein
shall be construed to be an arrangement or understanding with
the bank or depository for the payment of such check or draft.

(d) It is further provided that nothing in this act shall apply
in cases where checks or drafts were actually honoted by bank or
banks on which they were drawn.